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what is wet settlement act?

what is wet settlement act?

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

According to this law, settlement agents are required to disburse the funds on or before the closing date.

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carnahandavid's picture
carnahandavid | Joined: December 21, 2006 04:07 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

At the time of settlement sellers want their money as early as possible after signing the deed. Most expect to receive a check at the settlement table.

This law was enacted for preventing delays by lenders in sending the funds to the settlement attorney. Previously what use to happen is that settlement attorney used to hold the closing & then send closing documents to lender for approval. After the documents were reviewed & approved, lender normally used to send a check to settlement attorney. This process used to take 1 or 2 days but in some instances it can also happen that it takes almost 2 weeks.

Wet Settlement Law forces lenders to provide the funds at or before closing in the form of wired funds, cash or certified check at the time of settlement. In return lenders require that the settlement attorney does not disburse the funds until mortgage lien is recorded in the land records.

David

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Sellers are benefited because of this law as now they are assured that they will receive the funds within two days after the settlement.

Nowadays most of the lenders wire money to the settlement office which helps settlement attorneys to disburse the funds on the day of settlement or the next day. This law has helped in the overall settlement process.

Maria Bello

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

This law varies from state to state. Like in Virginia, the settlement agent is required to distribute funds within 2 business days after the funds are deposited in their trust account. While in District of Columbia, the funds are required to be disbursed within 1 business day. And in Maryland lenders are required to provide the funds on or before the day closing occurs to settlement company.

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sara's picture
sara | Joined: July 5, 2006 03:16 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Jav,

Welcome to the forums.

The term Wet Settlement means that when a person attends the closing in a mortgage loan transaction, the lender or closing agent should be ready to provide him with the funds.

Many states such as Maryland, Virginia etc have enacted laws on Wet Settlement. For example, in Maryland, the Wet Settlement Act requires that the lender must provide the funds at the day of closing itself.

Thanks,

Sara

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Are the States of Washington and Idaho Wet Funding States

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Niicss's picture
Niicss | Joined: October 3, 2005 11:54 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Jane

As far as I know, States of Washington and Idaho are not Wet Funding States.

Thanks.

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Does this law apply to a construction loan for a roof replacement where the out of state lender is requiring that a Morgage/Deed of Trust be in hand before distribution of funds can take place?

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Yes you will be getting the facility of wet settlement laws in case of construction loan in Maryland.

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Is Wyoming a Wet settlement state?

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adonis's picture
adonis | Joined: October 22, 2005 05:04 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Welcome Mary,

I don't think Wyoming is a wet settlement state.

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Does Tennessee law require table funding

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sara's picture
sara | Joined: July 5, 2006 03:16 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Y,

Your query has been replied to in the given page:
http://www.mortgagefit.com/tennessee/closingloan-tablefund.html

Take a look at it. Hope it helps you.

Take care.

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